Thirty-fourth Report of Session 2017–19 Contents

Appendix 4

S.I. 2018/932

Social Security (Treatment of Arrears of Benefit) Regulations 2018

1.In its letter to the Department of 12th September 2018, the Committee requested a memorandum on the following points:

(1) Explain what periods of time are intended to be meant by “the current award” and “an award of an existing benefit” in regulation 8 (new regulation 10A(1)(a)).

(2) Explain the circumstances in which a payment to which new regulation 10A(2) applies would, but for that paragraph, fall to be taken into account in calculating capital.

2.The Department’s response to the Committee’s points is set out below.

Point (1)

3.New regulation 10A of the Universal Credit (Transitional Provisions) Regulations 2014 (the “TP Regs”) provides that when determining a claimant’s award of universal credit (“UC”) certain arrears of benefit are to be disregarded from the calculation of the claimant’s capital beyond the general 12 month rule (specified in regulation 48 of, and paragraph 18 of Schedule 10 to, the Universal Credit Regulations 2013, “the UC Regs”) where this relates to official error.

4.Under regulation 10A(1), this extended disregard will apply if certain conditions are met. Regulation 10A(1)(a) specifies a condition regarding the timing of payment of arrears. This condition will be met if the payment is either “received during the current award” (regulation 10A(1)(a)(i)) or “received during an award of an existing benefit or state pension credit and the claimant became entitled to the current award within one month of the date of termination of the earlier award” (regulation 10A(1)(a)(ii)).

5.As to the meaning of a payment received “during the current award”, the Department considers that the regulations are clear that a payment is “during” an award of UC if it is received at any point after the UC award begins and before the UC award terminates. This is the natural meaning of the word “during”.

6.A claimant’s UC award will terminate if the claimant is no longer entitled to UC. This will occur if a claimant no longer meets the basic conditions and financial conditions specified in sections 4 and 5 of the Welfare Reform Act 2012, if the claimant is excluded from entitlement for any reason (for example, if they are a prisoner—regulation 19(1) of the UC Regs), or if the claimant’s entitlement is terminated (for example, for failure to provide information or evidence regarding their claim—regulation 47(1) of the Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Decisions and Appeals) Regulations 2013). If a claimant’s UC award is terminated they are no longer entitled to UC so there is no award during which to make a payment.

7.The Department notes that the Welfare Reform Act 2012 includes a number of provisions about making awards of UC. For example, section 1(2) states that “UC may…be awarded to”. The UC Regs refer to the duration of UC awards. For example, regulation 21(3C)(a) states: “…the claimant was previously entitled to an award of UC the last day of which fell within the 6 months preceding the date on which the claim is made”.

8.As such, the Department considers that the legislation is sufficiently clear in its explanation that the period of time during which a payment of arrears can be received starts at the point an award is made, and ends when the UC award terminates.

9.The same approach applies in respect of a payment received “during an award of existing benefit or state pension credit”. A payment is “during” an award of an existing benefit (defined in regulation 2(1) of the TP Regs) or state pension credit if it is received at any point after the existing benefit/pension credit award begins and before that award is terminated.

Point (2)

10.Regulation 48 of, and paragraph 18 of Schedule 10 to, the UC Regs set out the general rule for disregarding arrears of benefit in UC. This rule provides that arrears will be disregarded for a 12 month period from receipt. New regulation 10A(2) applies a special rule for the disregard of arrears, which takes precedence over the general rule, if the conditions in regulation 10A(1) are met. This provides that the disregard will apply until the termination of the UC award (if later than 12 months from receipt of the arrears).

11.The phrase “notwithstanding anything in the Universal Credit Regulations” in regulation 10A(2) refers to the general rule. The Department did not include an express reference to those provisions as the Department considered the special rule sufficiently clear without it. The Department also ensured the Explanatory Note explained the effect of new regulation 10A(2) to help readers. This states: “There is currently no provision [in the UC Regs] for the payment to be disregarded for a longer period if it is paid out for official error. The amendment to the UC (TP) Regulations provides for the longer disregard to apply until the termination of the UC award where…”.

12.Further, the Department notes that the approach taken in regulation 10A(2) to disapplying anything in the UC Regs, expressed as “notwithstanding anything in the Universal Credit Regulations”, is consistent with other uses of this phrase in the TP Regs (and in other social security legislation). For example, regulation 8A(b) of the TP Regs states the following: “Where an award of housing benefit terminates under regulation 8… if a claim for universal credit is made because the claimant moves to new accommodation… then, notwithstanding anything in the Housing Benefit Regulations 2006, housing benefit is paid directly to the claimant.”

13.The Department hopes the above information sufficiently clarifies the points raised by the Committee. The Department would be happy to provide further information about new regulation 10A if it would be helpful.

Department for Work and Pensions

18 September 2018

Published: 19 October 2018